What to do next??

[wally]

Just found this forum, and read some threads, sounds like wise people around here

I will give you my situation, and would love to hear any suggestions what direction people would take...
I am at a crossroads of what do do next, too many choices

Current situation;
....deleted ;p

I am thinking of selling the unit that is paid off (capital gains payment), and pooling the cash and shares as well to buy a house to live of around $600K.
This would leave me with a mortgage of around $250K for the new PPOR.

The other option is just to keep renting long term and buy another IP, but if i do this i would probably rent a much nicer place so i could see the rent going up to around $500-600PW.

What would you do? Especially in the current housing market...

 

[Jacque]

Hi Wally

It's not really a matter of asking others what they would do, as it's really a lifestyle decision for you in this situation. Home ownership means different things to different folks- for me it's about security, having an asset that I control and no one can kick me out of (excepting the bank if I fall on hard times ) and the knowledge that I have something I can call my own (or at least will one day!). I do know that, if I hadn't bought and sold my PPOR's along the way, I wouldn't now be living in the one that I am now- which I happen to love immensely and don't intend moving from for at least another decade or so

Then there are others who are comfortable with renting, have no intention of settling down into the so-called "mortgage monster" slavery and prefer to maintain a lifestyle instead, one that they wouldn't be able to do if they were busy paying off a non tax-deductible loan. For some, it's an unnecessary mill around their neck that restricts their choices in life. For others, it's seen as a way to build up your asset base and retain control. Your call, really, as you no doubt already know.
How much are you comfortable with, given your income and cashflow situation?

 

[MarkB]

Jacque's right.

I don't care how good your spreadsheeting and financial analysis skills are, you'll never be able to put a dollar value on the benefits of living in your own home.

 

[BV]

I am thinking of selling the unit that is paid off (capital gains payment), and pooling the cash and shares as well to buy a house to live of around $600K.
This would leave me with a mortgage of around $250K for the new PPOR.

Wally

I will say that in your particular situation you should sell.

You can put all your money into your PPOR and then borrow against the equity to invest in property or shares.

Ok you will pay CGT on 1 of the IP's but afterwards your PPOR will cost you very little to hold and your future investment loans will be 100% tax deductible.

Cheers